Today we had two site visits. Vietnam-Singapore Industrial Park (VSIP) and II-VI, which is located in the industrial park. VSIP is a joint venture between Vietnam and Singapore that uses land to build factories and residential areas for companies and workers to move into. Singapore doesn’t have the land to open these parks in their own country, so they partner with other countries to open them. The only real con about the VSIP is that it’s more expensive for companies to set up there than to buy land locally. However, there are many more pros. VSIP has its own management board that deals with the government so the companies don’t have to themselves. They provide a stable power supply for the factories and they have a customs office on site, so exports and imports are made significantly easier. VSIP has locations in all parts of Vietnam from Saigon, to Da Nang, to Hanoi. Vietnam has also partnered with Thailand in a similar venture.
II-VI is a material science production company. They work in optics, materials, thermoelectrics, and laserheads. They’re vertically integrated so they do everything from extract the raw materials to creating casings and finished products, which means their competitors have to buy from them. They expanded into Vietnam after China became too expensive to create their low-end high-volume products because 60% of the cost is from labor. They used to face problems of worker turnover after the Tet holiday, where workers go home for a couple months after saving money all year. The first year they were in Vietnam they had turnover of 50%. Since then, they have dropped it down to 2% by paying for the bus trip back after Tet, and doing small things like celebrating operators birthdays. Turnover for II-VI is incredibly important because they have to train their workers for 6-8 months depending on the job they’re hired for, and there are no universities that teach optics. I’m doing research with a material science professor in the fall, so this visit in particular was interesting to see the industry side of material science.